Medical Financing, For Commercial Real Estate

Doctors or other practitioners in the medical field seeking commercial real estate loans will find the absolute best options in the market today.  Medical financing is competitive and banks/lenders continue to compete hard to win over borrowers in this sector, despite the overall economy, and liquidity issues we continue to face. 

The reason is simple, Doctors are the best credit risk and have the lowest default rates in the industry.  In addition, the national trends and demographics support the sector as well, i.e. with the ageing baby boomers, and medical advancement in general.

Medical Financing

Medical financing for real estate purchase or refinance comes in many different programs.  For example, 90% financing with 10 year fixed rates is still common.  30 Year amortization though now rare for general commercial mortgages, is still widely available for doctors that want to keep monthly payments as low as possible.  Getting a loan at 100% or even over the value of the real estate, i.e. with a second loan in the form of a line to 130% of the value of the real estate is still available as well (Though we often warn borrowers not to get over leveraged).

Interest rates are of course, very low within this sector as well.  Practitioners can expect to get the tightest margins around as banks compete hard to win over medical borrowers.  We are currently seeing a 20 to 40 basis point reduction in rates for medical financing compared to general commercial real estate loans. 

All in all medical practitioners should get out and talk to a few non local sources as they often have options the local banks simply do not have.  There are several non depository lenders out there that have long term fixed rates, high leverage and other unique programs.

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